Social Safety Net and Pension Reform in Iraq
2003–2009 || U.S. Agency for International Development
In Iraq, Deloitte supported the Ministry of Labor and Social Affairs (MoLSA) and the Ministry of Finance (MoF) to implement Social Safety Net (SSN) and pension reform programs. Deloitte, the MoF, and MoLSA worked closely with USAID Baghdad and other international donors to design and implement a $250 Million Social Safety Net program and a more sustainable pension program.
The intention of the Iraqi SSN was to target disadvantaged populations and the unemployed via the public distribution system (PDS). Authorities sought savings on the PDS without sacrifices to the quantity or quality of the distributions. Additionally, authorities wanted to introduce a new social safety net for the poor, to help mitigate some effects of a proposed reduction in oil product subsidies. The program aimed to benefit around one million of the poorer households in Iraq through increased SSN coverage and a voucher scheme. The primary objectives of the pension reform effort were to improve administration of current pension systems to secure sustainability and reduce budget subsidies.
Deloitte contributed technical knowledge and political awareness to help Iraq's Ministry of Finance and the Ministry of Labor and Social Affairs undertake challenging but necessary reforms. The team's implementation support covered two main areas:
Social Safety Net
Deloitte employed business process reengineering, training, public outreach, and legislative reform to improve coverage and payment status of Iraq's SSN. The new SSN package included such components as social services, means-tested cash transfer, and micro-financing and entrepreneurial training. Within this effort, Deloitte implemented an information technology (IT) pilot system covering knowledge management and reporting across SSN eligibility, applications, payments, MIS, benefits calculation, and ID generation. A dual-phase pilot reduced the impact of the SSN transition period on the poor. The system was also designed to generate inputs for policy analysis and evidence-based decisions to reduce poverty.
Deloitte also supported the drafting of legislation to incorporate the targeted, means-tested SSN package into national policy. In addition, the team helped institutionalize management and governance vehicles for the SSN program (SSN Joint Committee and Antipoverty Committee). The SSN IT system was deployed at the central (MoLSA HQ) and local (MoLSA offices in 18 governorates) levels.
In order to improve administration of current systems to secure sustainability and reduce budget subsidies, Deloitte supported the following activities:
Deloitte designed a self sustainable, multi-pillar pension system to reduce poverty in the elderly population and assist the Government of Iraq (GOI) in leveraging funding. Public education programs and media campaigns strengthened public support for pension reforms and the Iraqi Pension Reform Steering Committee was created to secure Government commitment for pension reform.
Within the MoLSA, updated legislation was aimed at expanding social security coverage and improving revenue collection. Communication with social security stakeholders improved. A data capture unit, software, and training for the MoLSA increased data capture through better processes and increased capacity. Amendments to the State Employees' Pension System were designed to facilitate long-term reforms and media plans were prepared to establish public awareness.
Within the Ministry of Finance, Deloitte increased coordination of pension reform efforts. Amendments to legislation aimed at restoring equity among pensioners and reducing discrimination were drafted and prepared for submission. The impact on the Iraqi budget was mitigated through an ongoing review process.
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